July truck sales see first rise after year of decline

Written by Yogima Seth | New Delhi | Updated: Aug 6 2009, 07:16am hrs
Truck sales, one of the most reliable leading indicators of economic activity, have moved back into positive territory after four consecutive quarters of double-digit declines.

Truck sales in the 5-49 tonne segment, jumped in July by 8.33% to 16,265 units, compared with 15,014 units in the same month last year, according to data compiled by Indian Foundation of Transport Research & Training, a Delhi-based sector tracker.

The July numbers also show an improvement over the June 2009 figures for medium & heavy vehicles at 15,659 units, which was a decline of 31% over last year.

While the share price movement of truck manufacturers underscored the trend, there were voices of caution. Dilip Chenoy, director general, Society of Indian Automobile Manufacturers (Siam), said, The growth in July is statistical as the segment had registered a decline of nearly 40% in July last year, which resulted in a significantly lower base.

Siam is yet to come out with commercial vehicle sales numbers for July. But provisional data shows that the rate of decline has come down significantly from over 50% decline recorded over the last six months to 9.7% in July in the heavy commercial vehicle category that includes trucks, tippers and trailers in the 12 to 49-tonne category.

The improvement mirrors the changes taking place in business confidence index released by the Ncaer along with the RBI monetary policy in July and the improvements noticed in the monthly index of industrial production.

There has been a significant improvement. Going forward, the segment is likely to receive a further boost from the large allocation for development of infrastructure in Budget 2009-10, said the spokesperson of VE Commercial Vehicles, a joint venture between Eicher Motors and Volvo.

The shares of Indias largest truck maker by sales, Tata Motors, rose 1.49% on Wednesday at the NSE on reports that total commercial vehicle sales (including trucks and buses) have risen 18% to 48,054 units in July 2009 over that of July 2008. Tata Motors American depository receipts too have ended 7.20% higher at $11.31 on the New York Stock Exchange on Monday.

The company registered an overall growth of 27% in commercial vehicle sales at 28,408 units against 22,381 units in July 2008. Sales of big trucks, known as M&HCVs has turned positive after almost a year and are at their highest since September 2008a growth rate of 6%, year on year.